Autonomous cars and the issue of insurance: Who pays?
About a year ago, a self-driving Tesla was involved in a fatal crash in Florida. More recently in Arizona, a self-driving Uber SUV collided with two other cars before flipping over. When an autonomous vehicle crashes, who is liable? In a recent NPR's All Tech Considered, Yuki Noguchi considers just this issue in her story about self-driving cars and the questions about who carries insurance.
It's a big issue and one that is being debated in board rooms and legislative chambers right now, and an issue that will change our industry significantly. Geico's billionare owner says, "If the day comes when a significant portion of the cars on the road are autonomous, it will hurt Geico's business very significantly."
Right now, insurance rates are calculated mostly based on attributes of drivers — their claims histories, driving records and such. Increasingly, some insurers also use apps or devices that allow them to track speeding and other behaviors. Insurers can then offer discounts as rewards for safe driving.
A driverless car changes that model, shifting the insurance toward automakers, and away from drivers or car owners.
That is the current thinking - and the question is not so much "if" as "when." Noguchi notes that for a number of years, there will not be fully autonomous cars. University of South Carolina law professor Bryant Walker says until then, fault and liability will be determined case by case, just as it is determined now.
" 'Who was speeding? Was there a stop sign? What was the weather? Did the vehicle fail?' — and in the future, the same questions will be asked," Smith says, but the difference will be that the tech-savvy cars of the future will gather far more data to help determine fault.
"Details of that will be worked out by courts in individual cases and those individual cases will provide the backdrop against which insurers start determining their exposure and then eventually the rates that they charge," he says. But for now, the technology is too new and there are no cases working their way through the court system."
When will self driving cars be widely available?
Ford plans a fleet of self-driving cars for ride-sharing in 2021. Why so much focus on the ride-sharing fleets? Surveys show that despite the promise of enhanced safety, most consumers are still fearful of self-driving cars. That goes a long way to explaining the entry into the ride-sharing market. First, ride-sharing companies are a motivated and receptive market, viewing autonomous cars as a way to reduce labor ... and from the car manufacturers' vantage, it is also a way to familiarize the general public with self-driving vehicles and to jump-start personal demand.
In When will self-driving cars be everywhere?, Johana Bhuiyan of tech journal Recode says:
“If it’s not the personal car ownership model, it’ll happen way, way faster — 10 or so years — that these cars will be on the road and the mass market will experience them and have access to them.”
Her podcast offers a discussion and an update on the current state of driverless cars. One other resource for keeping up with developments in the technology is the blog Driverless Car Market Watch.